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Business Times reports that as wage negotiation season gathers momentum, economists are warning of increasingly unstable labour relations and more strikes as workers demand higher pay to cope with the soaring cost of living.
Economists say rampant fuel and food inflation are the biggest concerns for the lowest-paid workers because these items account for the biggest portion of their costs. Last week, the National Union of Metalworkers of SA (Numsa) confirmed it was demanding a 20% pay rise in the automotive sector. This followed Eskom recently agreeing to a 7% increase for most of its workers. The Public Servants Association is also undertaking industrial action at the SA Revenue Service, which has tabled a 1.39% offer. The PSA is instead demanding 11.5%. The union is also in dispute in separate public-sector wage talks, demanding a 10% increase after rejecting the government’s 2% offer. Azar Jammine of Econometrix expects to “see more strike action” in SA, saying wage negotiations in the public sector posed the “biggest challenge of all” since they have “enormous implications for how investors and ratings agencies see us”. He believes the 20% increase Numsa is demanding in the automotive sector is extreme and probably a tactical starting point in negotiations. Stanlib’s Kevin Lings also expects to see more strikes because “it does feel like the unions and companies are going to be quite far away from each other as a starting point”. He noted that SA had a “very desperate labour market” and was “1.4-million jobs below where we were before Covid”. Those still working often subsidised household members who have been retrenched, further fuelling the demand for higher wages. Numsa spokesperson Phakamile Hlubi-Majola is predicting more strikes, saying there is “fertile ground” for unrest in a country with such high levels of inequality. Connie Mulder, head of the Solidarity Research Institute, said while the union would make sure its members wouldn’t fall behind in wage terms, it didn’t believe in making extreme demands that would severely affect employers also struggling to recover from the pandemic. Mulder believes there “should be a middle ground where we can find one another”.
- Read the full original of the report in the above regard by Nick Wilson at BusinessLive (subscriber access only)
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